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PPG Industries (PPG) Acquires VersaFlex, Broadens Portfolio

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PPG Industries, Inc. (PPG - Free Report) announced the completion of its acquisition of VersaFlex from DalFort Capital Partners. A portfolio company of DalFort Capital Partners, Versaflex specializes in coatings for water and waste water infrastructure, flooring, transportation infrastructure and industrial applications. The financial terms of the deal were not disclosed.

Versaflex is an aggregation of four U.S.-based coatings companies, with roughly 130 employees and annual revenues of around $70 million in 2020. It has three manufacturing sites in Kansas, Oklahoma and Washington.

This acquisition will support PPG Industries’ commitment toward broadening its technology portfolio and customer touch points. VersaFlex’s strong growth outlook, segment mix, product portfolio as well as manufacturing expertise are expected to complement and expand PPG Industries’ current product offering.

Shares of PPG Industries have gained 16.7% in the past year compared with 24.9% rise of the industry.

The company, last month, stated that it expects overall global coatings demand to continue to improve in many of its end-use markets and across all of its major regions. The company also expects to gain from volume recovery in its technology-advantaged automotive refinish and aerospace coatings businesses, synergy realization and earnings accretion through integration of recently-announced acquisitions as well as an eventual inventory restocking in specific industrial end markets.

Factoring in current global economic activities and the near-term economic uncertainty associated with the pandemic, PPG Industries expects total sales volume for the first quarter of 2021 to be flat to modestly higher, differing by business and region. PPG Industries also expects to achieve total incremental cost benefits from restructuring measures of $30-$35 million in the first quarter.

The company also sees adjusted earnings for the first quarter to be $1.55-$1.61 per share. The mid-point of this range indicates an increase of more than 20% over the comparable year-ago figure of $1.31.

 

Zacks Rank & Other Key Picks

PPG Industries currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 84.3% for the current fiscal. The company’s shares have surged around 178.4% in a year. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BHP has an expected earnings growth rate of 65.6% for the current fiscal. The company’s shares have gained around 62% in the past year. It currently holds a Zacks Rank #2.

Impala has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied around 72.7% in the past year. It currently sports a Zacks Rank #1.

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